AI Looks to SAP

A chatbot evaluates the work of SAP

The E3 editorial team provided the Google program NotebookLM with statements from E3 Magazine ranging from February 2021 to December 2024, along with the web links e3mag.com and sap.com as a supplementary knowledge base. We then requested an assessment of SAP's strategy and the current situation. The responses we received aligned with our editorial publications, but the level of precision and succinctness achieved was noteworthy. We of course refined the language of the responses and optimized them for effective storytelling. At the annual kick-off 2025, our February issue, we will present a review of four years of reporting on SAP.

I have identified various aspects of SAP's strategies that could be improved.

My critiques center on SAP's prioritization of cloud computing and AI (artificial intelligence) over its core business competencies, and its excessive focus on IT megatrends rather than leveraging its strengths. In the E3 magazine, we highlighted SAP's strategic shift away from its business and organizational strengths, aiming to become a "better hyperscaler." The E3 editorial team acknowledges SAP's proficiency in mapping the intricate business processes of medium-sized companies and large corporations; however, SAP is attempting to stay abreast of current trends by offering cloud and AI solutions.

SAP cloud strategy and AI focus

We have concerns regarding SAP's prioritization of cloud transformation, which is centered on profit maximization for the company. However, this strategy may not align with the best interests of SAP customers. E3 suspects that technical and organizational justifications are being used as a pretext to achieve more predictable sales. Ccustomers require a tailored approach to their cloud migration, known as a "lift-and-shift" strategy.

I additionally have reservations about SAP's prioritization of AI, given the company's lack of in-house expertise in this field. I would like to understand the business and organizational value propositions of Cloud ALM, Signavio, and LeanIX. In my view, SAP should place a stronger emphasis on enterprise architects, process mining, and composable ERP rather than solely on cloud computing and AI.

SAP Hana positioning and strategy

Although Hana has been a commercial success for SAP, the E3 editorial team has expressed concerns regarding the way SAP markets and uses the database, perceiving it as a technical curiosity rather than a viable ERP tool. Many members of the SAP community contend that SAP's emphasis on Hana could potentially lead to vendor lock-in, potentially resulting in customers becoming dependent on the platform.

I would argue that SAP should reorient its focus towards its core competencies and prioritize the needs of its customers. I believe that SAP could achieve a more successful future by returning to its core strengths. I propose that S/4 Hana, as an on-prem system with the business expertise of decades of SAP history, could be the basis for an even more successful native cloud ERP called S/5 Hana. I fear that SAP is missing out on the "composable enterprise" megatrend by focusing on the cloud and AI.

SAP licenses and indirect use

The E3 editorial team has expressed concerns regarding the complexity of SAP's licensing model, which they feel is not easily understandable by customers. The ongoing discussion about the justification and usefulness of indirect use is still underway. I have also criticized SAP's use of its dominant position in the global ERP market to set high license and maintenance prices.

I feel that SAP is placing too much emphasis on share price and financial analysts, rather than on meeting the needs of its customers. There appears to be a discrepancy between the expectations of SAP customers and the strategy of SAP CEO Christian Klein.

Conclusion on AI and the lessons for the SAP community

Around 90 percent of this text was generated by an AI model from the E3 archive. There were no errors in the content, but editing was unavoidable. This demonstrates the necessity of integrating AI tools while also emphasizing the importance of consolidating and orchestrating these tools. The extent to which SAP recognizes this responsibility cannot be determined at this time. In any case, the state of things is that an open platform such as SAP BTP is preferable to a closed and preconfigured AI system. We will also be discussing the added value of AI on the Business Technology Platform at the Steampunk and BTP Summit 2025 in Heidelberg, Germany. Register now and start the new year successfully! Thank you and see you on March 5 and 6 in Heidelberg.

SAP appoints Andreas J. Wagner as new Head of Austria

Andreas J. Wagner has assumed the role of Managing Director of SAP Austria, effective at the start of 2025. He is a seasoned digitalization expert, having held leadership positions at SAP for 18 years. Hailing from Styria, he is relocating to his home country from the SAP headquarters in Walldorf, Germany. In his new role, he will oversee the operations of SAP's Vienna branch and spearhead the digital transformation of Austrian companies. Wagner's educational background includes a master’s degree in commercial sciences from the Vienna University of Economics and Business Administration. His professional experience includes roles as a controller and product manager at Johnson & Johnson, and later as the Head of Change Management in DHL Customer Service for Europe in Brussels.